FHA Loan

FHA Loan

An FHA Loan, which stands for a Federal Housing Administration Loan, is administrated by lenders, but backed by the federal government. The FHA-insured loans encourage lenders to extend credit to borrowers who might not qualify for conventional home loans. 


  1. 3.5% down payment minimum
  2. Allows buyers who may not qualify for a home loan to obtain one low down payment
  3. Sell can pay all of the closing costs and prepaids up to 6% of the sales prices as part of the negotiations of the contract
  4. Interest rates are typically less than conventional loan
  5. More flexible in credit and past financial history


  1. Lifetime monthly MIP
  2. Upfront MIP fee that is rolled into the noteMonthly
  3. Monthly MIP is higher than conventional loan
  4. Size of the loan could be limited


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